News & analysis of the United States Court of Appeals for the Third Circuit, by Matthew Stiegler

New opinions — a capital habeas reversal and a bankruptcy affirmance

The Third Circuit today ruled that a PA death-row inmate was entitled to a new sentencing hearing due to ineffective assistance of counsel. The court concluded that the PA Supreme Court’s denial of penalty-phase relief was unreasonable and based on a factual premise that was clearly false. The court expressly relied on the ABA Guidelines to assess counsel’s performance. It found that the state court’s prejudice ruling also was unreasonable because it misstated the standard and failed to discuss most of the relevant evidence. The court also affirmed the denial of guilt-phase relief.

Joining Smith were Vanaskie and Roth. Arguing counsel were Stu Lev of the Federal Community Defender for the petitioner and Jennifer Peterson of PA AG for the state.

When a debtor files for bankruptcy and undergoes reorganization, there often aren’t enough assets to pay off all the debts, and the bankruptcy rules provide a clear hierarchy for which creditors get payed first. But 11 U.S.C. 363 also lets a debtor sell its assets outside of the bankruptcy reorganization. When it does, must any funds produced by the sale be distributed using the same hierarchy?

In a lucid opinion issued today, the Third Circuit upheld a 363 sale, rejecting arguments by the government that the sale upset bankruptcy’s priority rules.

Joining Ambro were Fuentes and Roth. Arguing counsel were Thomas Clark for the government and Anthony Clark of Skadden Arps for the debtor and purchasers,